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Romania Economy

    Economy—overview: After the collapse of the Soviet Bloc in 1989-91, Romania was left with an obsolete industrial base and a pattern of industrial capacity wholly unsuited to its needs. In February 1997, Romania embarked on a comprehensive macroeconomic stabilization and structural reform program, but reform subsequently has been a stop-and-go process. Restructuring programs include liquidating large energy-intensive industries and major agricultural and financial sector reforms. Today, Romania is continuing its difficult transition to a market-based economy. GDP contracted by an estimated 7.3% in 1998 after a 6.6% decline in 1997. Tight monetary policy and slower exchange rate depreciation earlier in 1998 helped lower inflation to an estimated 41% from 152% in 1997. The large current account deficit and concerns about meeting debt payments in 1999 contributed to increased pressure on the exchange rate towards the end of 1998. Replacing the IMF standby agreement (suspended because of lack of progress on structural reforms), servicing large debt payments, and bringing the budget under control are key priorities for 1999.

    GDP: purchasing power parity—$90.6 billion (1998 est.)

    GDP—real growth rate: -7.3% (1998 est.)

    GDP—per capita: purchasing power parity—$4,050 (1998 est.)

    GDP—composition by sector:
    agriculture: 19%
    industry: 41%
    services: 40% (1997)

    Population below poverty line: 21.5% (1994 est.)

    Household income or consumption by percentage share:
    lowest 10%: 3.8%
    highest 10%: 20.2% (1992)

    Inflation rate (consumer prices): 41% (1998 est.)

    Labor force: 10.1 million (1996 est.)

    Labor force—by occupation: NA%

    Unemployment rate: 9% (1998 est.)

    Budget:
    revenues: $10 billion
    expenditures: $11.7 billion, including capital expenditures of $1.3 billion (1997 est.)

    Industries: mining, timber, construction materials, metallurgy, chemicals, machine building, food processing, petroleum production and refining

    Industrial production growth rate: -17% (1998 est.)

    Electricity—production: 59.245 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 72.11%
    hydro: 26.35%
    nuclear: 1.54%
    other: 0% (1996)

    Electricity—consumption: 60.045 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 800 million kWh (1996)

    Agriculture—products: wheat, corn, sugar beets, sunflower seed, potatoes, grapes; milk, eggs, beef

    Exports: $8.2 billion (f.o.b., 1998 est.)

    Exports—commodities: textiles and footwear 23%, metals and metal products 18%, machinery and equipment 9%, chemicals 7% (1997)

    Exports—partners: Italy 20%, Germany 17%, France 6%, Turkey 4% (1997)

    Imports: $10.8 billion (f.o.b., 1998 est.)

    Imports—commodities: machinery and equipment 23%, fuels and minerals 19%, chemicals 8%, foodstuffs (1997)

    Imports—partners: Germany 16%, Italy 16%, Russia 12%, France 6% (1997)

    Debt—external: $10 billion (1998 est.)

    Economic aid—recipient: $510.1 million (1995)

    Currency: 1 leu (L) = 100 bani

    Exchange rates: lei (L) per US$1—11,353.6 (January 1999), 8,875.6 (1998), 7,167.9 (1997), 3,084.2 (1996), 2,033.3 (1995), 1,655.1 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)